Bangkok--26 Aug--Standard & Poor's
Standard & Poor's investment-grade composite spread tightened yesterday by 2 basis points (bps) to 246 bps, while its speculative-grade counterpart expanded by the same increment to 831 bps. By rating, the 'AA' spread tightened 4 bps to 161 bps, and 'A' and 'BBB' tightened 2 bps each to 208 bps and 318 bps, respectively. The 'BB' spread expanded 3 bps to 561 bps, and 'B' and 'CCC' expanded 4 bps each to 792 bps and 1,320 bps, respectively.
Spreads remained largely unchanged by industry, with banks remaining at 367 bps; financial institutions, utilities, and telecommunications tightening marginally by one basis point each to 225 bps, 235 bps, and 345 bps, respectively; and industrials tightening 2 bps to 425 bps.
Despite material tightening since their all-time highs reached in December 2008, the speculative-grade spread remains near some of the highest levels ever recorded in a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
Media Contact:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
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